For Details, Contact:
External Affairs
email: pacamail@ncua.gov
Fax: (703) 518-6409

Retirement account protection increases April 1

Retirement account coverage increases to $250,000;
standard share account coverage remains $100,000

Alexandria, Va., March 30, 2006 — Insurance protection on retirement accounts in federally insured credit unions increases April 1, 2006, to $250,000, while coverage on all other types of share accounts remains $100,000 in compliance with an interim final rule NCUA issued amending insurance protection and implementing changes required by recent Congressional reform.

Retirement protection changes become effective now; however, changes to insurance signs and publications are not required immediately. The NCUA is working to ensure relevant publications are revised and distributed to credit unions as quickly as possible. The Your Insured Funds and Benefits of Federal Insurance brochures and the Federal Credit Union Handbook will be updated and available on NCUA’s website during the first week of April. The printed documents are expected to be available by mid-May. Revisions to the electronic Share Insurance Estimator on NCUA’s website will be available as soon as possible. NCUA’s advertising regulation and share insurance sign will also be revised and reissued in late 2006.

Effective April 1, 2006, the interim final rule provides the following:

• Increases share insurance limits to $250,000 for retirement accounts such as traditional and Roth IRAs (Individual Retirement Accounts) and Keogh accounts;
• Retains the $100,000 insurance limit for all other types of share accounts;   
• Requires NCUA and FDIC to jointly determine if an inflation-adjusted increase is appropriate for insured accounts beginning in 2010 and every five years thereafter;
• Includes pass-through coverage on employee benefit plans while limiting acceptance of shares in employee benefit plans to insured credit unions that are well or adequately capitalized; and 
• Clarifies coverage for qualified tuition programs, commonly referred to as 529 plans, and share accounts denominated in foreign currencies.

While retirement accounts gain increased coverage, the rule also retains the provision that retirement accounts are insured separately from other accounts at the same institution. NCUA issued the interim final rule with a 60-day comment period. 

The National Credit Union Administration charters and supervises federal credit unions. NCUA, with the backing of the full faith and credit of the U.S. government, also operates the National Credit Union Share Insurance Fund insuring the accounts of nearly 85 million account holders in all federal credit unions and the majority of state-chartered credit unions.  NCUA’s operation is funded by credit unions, not federal tax dollars.